Car Loan: Co – Signer versus Co - Borrower

When it comes to opting for a loan, terms like co – signer and co – borrowers have slowly become popular over the last few years. This is no different from the car loan. These two profiles share similar traits, and yet possess different features. For one, the co – signer improves your chances for your vehicle loan approval. A co – borrower can be a concern, especially when considering the income. This co – borrower will also have distinctive rights the asset being purchased, where in this case, is the car.

Given below is all that you need to know about the auto loan, and how this two profile will affect them:

What is the role of the co – signer in an auto loan?

A co – signer for an auto loan is considered to be a ‘silent partner.' In this case, the primary applicant ‘borrows’ the best of the credit scores in order to get the required approval for the car loan approval. Additionally, in some cases, the co – signer can be used if the primary applicant does not have garnish able income. In this case, the co – signer’s income is verified but the funds are not joined. Once the co – signer signs the loan, they are not expected to be actively involved with the repayment unless something goes wrong.  In the event the primary borrower defaults on loan, the co – signer will be responsible for making payments. Additionally, the co – signer’s credit score will also be affected, especially if there is a delay in payment or payments stop completely. Once the loan approval has proceeded, the co – signer has no ownership rights when it comes to the car. This is also inclusive of the situation where the co – signer will be required to pay for the repayments. 

What is the role of the co – borrower in a vehicle loan?

If the co – borrower is made to be a part of the auto loan, it is most likely the cause of two different situations. One situation implies that the primary borrower lacks the qualifying income for the required approval. Secondly, it could include a loan requirement by a married couple, who individually may not be able to qualify for the loan. In this profile, co – borrowers are permitted to combine funds wherein which, both of their names will appear on the title to the vehicle, permitting ownership to both individuals when it comes to the vehicle. In the event the couple splits, the ownership of the product will need to be determined before the payment proceeds henceforth. However, both individuals are equally responsible for making payments on the vehicle. In the event, a co – borrow has the requirement to declare bankruptcy; the other individual will receive protection during the filing process.

Personal loan and co – signer: What are the questions you need to answer?

Amongst all the loan options available in the financial market, the personal loan has always been a viable option.  Not only does it provide you with financial flexibility, but it also offers you the means to opt for a loan amount that is not restricted. Additionally, since you can also apply for personal loan online, you can enjoy a convenient loan application.

However, to enhance your chances of getting a better loan amount, while enjoying a flexible repayment procedure, you can opt for a co – signer. A co – signer is another individual, who would share the same responsibility as a sole owner and whose financial profile will be combined with the primary applicant to increase the overall financial profile.

This facility is available to most loan options. But before you apply for this loan along with a co – signer, here are a few questions you need to answer before you proceed with the application.

Are you aware of the responsibilities as a co –signer?

If you are going to take on a co – signer for your personal loan, both individuals must be aware of the responsibilities. The co – signer should understand that it would be their responsibility if they primary applicant fails to repay back the borrowed funds. If the co – signer has a better credit score, the lending institute may approach this individual for the repayment.

What is the appropriate payoff plan?

Regardless of a co – signer, you must have a plan to pay off the loan. This is even more crucial if you have a co – signer as it is crucial that you have a plan that matches each other’s requirements. Additionally, it should not affect your co – signer’s credit history. Something as simple as a missed payment of a defaulting on loan will affect both the primary applicant and the co – signers credit score. Alternatively, if you make timely payments, it will help increase your credit score.

Are you planning to borrow more than you can afford?

Whether you are planning to apply for personal loan online or at the bank, you and co – signer should ensure that each of your monthly loan payment amounts should not exceed your reasonable pay. Even though having a co –signer will help qualify for a larger loan amount, it is recommended that you opt for a limited amount. In other words, borrow only as much as you need and can afford.

Can your relationship survive?

You’ll be surprised how co – signing a loan can affect more than your credit score. It can also risk your relationship. Placing a financial issue between two individuals can change a relationship either in a good or bad way. Either the stress of the borrowing funds can strain a relationship or provide a means to strengthen it through open communication and mutual responsibility.

Home Insurance: Why getting one will make more sense

When it comes owning any financial product, a home will always be one of the most prized and high-value assets for all individuals. Not only does it offer an emotional satisfaction, but it also comprises of nearly 60 to 70% of an individual’s wealth investment. Consequently, it comes as no surprise that, a home is the second most reliable investment asset.

With over 200 million plus homes in the country, India has become the second largest country in terms of home inventory. With the economy expected to grow at a healthy pace shortly and a reduction in borrowing costs due to the demonetization move, the home purchase will continue to witness an increase in the coming years.

While owning a home will always be a dream if not a priority for individuals, when it comes to home insurance, it does not feature at all on the priority list. The reasons may vary, but in today’s time, it will benefit you if you invest in a home insurance policies.

Here are some of the benefits you can enjoy through this type of insurance:

Vulnerability to natural disasters: It may come as a surprise that India is a vulnerable country to plenty of natural disasters. Research has indicated that more than 58.6% of the landmass is prone to earthquakes of moderate to high intensity. At least 12% of the land in India is prone to floods and river erosions. Even 5,700 km of the 7,516 km long coastline of India is prone to cyclones and tsunamis. Additionally, the hilly areas are also facing risks of landslides and avalanches. However, the awareness of home insurance is relatively slow. It is estimated that only a small fraction of Indian homes have some form of home insurance. This insurance will cover damages caused by these natural disasters. In the event this disaster affects your home, you do not have to bear the entire cost of reconstruction of the house.

Provides the ideal coverage for homes within your home too: Having a majority of your wealth such as your home or any of your household articles insured can put you at a risk of significant losses. This, in turn, can result in emotional setbacks. Home insurance plans will not only protect your immovable wealth from such perils and natural calamities, but it will also protect your home items. In other words, it will also offer the ideal protection against items such as jewelry, clothing, electronics and much more. The ideal home insurance policies will provide you with the ideal protection for both your and your home items.

Various options available: Just as your financial needs and habits will differ from person to person, there are plenty of home insurance plans available in the financial market. You can easily opt for one that will suit your needs while offering you the ideal protection for the right price.

All you need to know about inactive and dormant savings account

It is not uncommon for several individuals to hold several saving accounts under one single name. With the introduction and convenience of online saving account opening, you can now own this account in a few seconds.

However, while is it easy to open several accounts, on the contrary keeping a tab on several bank accounts isn’t. Not only does it increase your confusion, but it will also lead to mismanagement and loss of funds. If you don’t keep track of your saving account, it can cost you funds. Here is all you need to know about inactive or dormant savings account:

When do bank accounts become inactive/dormant?

If you don’t make a transaction through your saving account for more than 12 months, the bank will classify your account as an inactive account. Furthermore, if that particular account does not witness any transaction for another 12 months, it would be further reclassified as a dormant account. The transaction mentioned in this case will consider the transaction made by you through debit cards, net banking or third party transactions. Bank – initiated transactions such as your interest charged and earned on the balance or any penalties or service charged debited are not considered. However, the credit of interest earned from fixed deposits is considered as customer induced transaction and helps keep the account active.

What are the restrictions on active and dormant accounts?

The restrictions on inactive/dormant accounts can vary from bank to bank. Some banks will impose a restriction on net banking facilities, phone banking, and ATM transactions. It can also extend cheque transactions.

Why do banks re – classify accounts to inactive and dormant accounts?

The main reason why a bank will reclassify your savings account is to reduce the risk of fraud in your account. By reclassifying your account, the awareness about your account is raised. A lookout will be kept for potential risks involved, wherein which due diligence will be carried out before any fresh transaction is made through them.

What does the bank do before reclassifying your saving account?

A bank will be required to notify you, at least three months before the reclassification of your account. They will also be required to inform you about the procedure for the re – activation of your account. If you choose to reply to the bank and provide the relevant reasons for the non – operation of your account, your account will still be considered as an operative account for the next year. However, if you don’t make a transaction through your account during this extended period, it will be classified as a dormant/inoperative account until the extended period. You will continue to receive interest on your balance even after your account gets reclassified as a dormant or inactive account.

How to reactive the saving account?

Reactivating your account is very simple, and does not require the same effort as the online saving account opening. You only need to make a deposit or withdrawal transaction to reactive your inactive account. To reactivate your dormant account, you will need to submit a written request at your home branch.

Are you aware of the different factors of the NRO account?

As per the Foreign Exchange Management Act, any individual is a resident of the India, if he or she stays within the country for more than 183 days, preceding the financial year. If the individual does not satisfy this condition, then he or she is considered a non – resident Indian, commonly known as NRI.

While this definition may determine the status of NRI, it also determines the financial requirements and functioning of the individual. As an NRI, and the individual can enjoy the benefits of earning in foreign currency and investing in banking products that offer the best benefits of currency conversion. One such main benefit and requirement is the NRI account.

In this case, an NRI can either opt for NRE or an NRO account. Amongst the two options, the Non-Resident Ordinary (NRO) will provide to be a beneficial investment. As an NRI, whose also earning in Indian income, this is the best option to invest your earnings.

Given below are some of the features of the NRO accounts and how it can benefit you:

• This account has a restricted reparability. An amount of only 1 million USD can be repatriated per financial year for any bonafide purposes.
• Unlike the NRE account, the interest that is earned in this account is fully taxable.
• TDS also known as tax deducted at the source is also applicable to the interest that is earned here. This is also subjected to DTAA also known as the Double Taxation Avoidance Agreement with other countries.
• This account can be maintained in Indian rupees
• It can also be held jointly with another Non-Resident or Resident Indian as well.

Given below are some of the FAQ’s asked and answered about the account:

Can I repatriate the funds from my NRO accounts?
The interest that is earned in your NRO account, especially if you have opted for a savings account is repatriable. However, the payment of taxes will be made before the repatriation happens. Additionally, you can repatriate only up to a maximum of 1 million USD per financial year.

What are the funds or assets that can be repatriated from this account?

The following funds or assets can be repatriated from the savings account:

• Proceeds from the sale of immovable property, shares and securities
• Assets acquired by inheritance or any legacy
• A fixed deposit with a bank, firm of company
• Provident fund balance or superannuation benefits.
• Amount of claim or maturity proceeds of an insurance policy
• Any assets held in India in accordance with the provisions of the Act, Rules or Regulations made by the government.

Will be required to pay tax on the interest income earned?

As per the current regulations, a tax that is deducted at the source on the interest earned on your account will have to be paid.

Bank account and marriage: How to ensure a balanced financial life

Amongst the several challenges newlywed couples will face, is not only living together but also money management. This will be a delicate task, something very few couples will master with ease and cooperation. After all, there will be a considerable difference between spending styles, financial independence and how and where the funds should be spent.

Amongst the several dimensions of spousal financial management, decisions about the bank account will be the most important. Choosing the right choice amongst the several types of the bank to account for yourself and your partner will go a long way to build a financial future.

Given below are certain steps for newlyweds who want to start a firm financial future and also build the right banking approach and account this year:

Consider respective banking styles and roles: As like any other issue in a relation, communication is the key to financial management. You will need to consider your respective availability, interest, and aptitude in handling your bank account. In most cases, such a decision will be shaped by your spending independence you each want and the level of trust you share between the both of you’ll. Compare your banking habits regarding physical bank accounts or whether you would prefer an online bank account. You need to understand that each relationship will be unique and therefore, every couple will most likely end up with a different financial organization.

Should you opt for a joint or separate accounts?

Another one of the key decisions you and your spouse would need to decide the right types of bank account. This would mean deciding between owning individual accounts or a joint bank account. In most cases, a joint account will be most beneficial for several reasons. For one, consolidating your deposits and withdrawals in one place will simply the financial management. Additionally, it can also be used to invest in a large balance, thus reducing fees and maximizing interest and account features. It can also be used to know how much funds is withdrawn from the online bank account, especially if it is concerned with joint spending. However, owning individual accounts will help in individual expenditures, especially if one individual does not approve of personal purchases of the other.

Customize automatic transfers to your account

Certain banks allow you to establish recurring automated transfers from and to your accounts. Such transfers will help you pay off your bills, replenish your funds and build your savings. All this can be done without any conscious effort on your part. In the case of individual bank accounts, you will need to assign various deposits and payments to your appropriate accounts. This would require you to split everything proportionally or establish a combination of the two accounts. In either case, automatic transfers can lighten your administrative burden, thus giving your sufficient time and resources to focus on other tasks.

Personal Banking: What is it and how can it help you?

Banking services are classified into different services, namely the personal and private banking. With personal banking, it refers to the wealth of services that are available to individuals from different financial institutions. To those who have some experience with any of the banking services such as savings and checking accounts and lending options such as loans, mortgages and lines of credits, you are facing a personal service of the banking institutions.

With the advancements in the digital and internet technology, plenty of new features has been added to this form of banking. For one, you will have the ability to view and interact with accounts online and make deposits and payments via phone or online services. You can even access any ATM’s from around the world and at any time. These banking services are also progressing furthermore to include other new banking services such as financial advising, retirement, planning and automatic bill payment at the most modern institution. 

Given below are some of the features of the personal banking services you can look out for:

Customer Management: Banking personnel from the personal service are well equipped and trained to ensure that you make only the best investment and financing decisions. They ensure that a good communication bridge is built and maintained with their clients, in order to understand their needs and preferences. In the end, they ensure that their clients only receive that which is best suited to their financial personality. If you need to make any investment, you can always ask for a personalised investment proposal, which will offer you the best options based on the current market trends and performance.

Quality: Quality is said to be not a coincidence, but a result of effort and efficiency. Today’s financial needs by each individual are not unique but also sophisticated and demanding. Not only are the products and services provided by banking institutes designed in such a manner to suit the needs of customers, but also ensure that the best of quality is presented to them. Flexibility yet fluidity is the much-needed requirements of the financial market, which banks aim to capture and provide in their offerings.

Special products and services: As previously mentioned, the financial needs and requirements of an individual will differ from person to person. Banks follow an objective to ensure that their customers make the most of their funds and the consecutive financial decisions. These very same banks are also coming up with different products and services that offer the best outcome, in terms of investment and financing.

Personal treatment: The key to an efficient and long-lasting relationship with clients is flexibility, transparency and sincere management. Most banking institutes aim to follow a basic mainstay where personalised management services and empathic communication is a focus.